MPs, MSPs and grassroots activists at Labour's conference in Perth gave a unanimous welcome yesterday to a package of reforms put forward by the party's internal devolution commission.
They endorsed plans that include making Holyrood responsible for housing benefit and the Work Programme, a Department For Work And Pensions-run jobs scheme, after Scots party leader Johann Lamont insisted a No vote in September's independence referendum must be "a vote for change".
UK party leader Ed Miliband also threw his weight behind the proposals, using his conference address yesterday to pledge: "We will bring power close to the people."
However, Scottish Government Finance Secretary John Swinney said Scottish Labour's plans to hand Holyrood greater control over income tax were "shambolic," following claims they were incompatible with Shadow Chancellor Ed Balls's pledge to re-introduce a bottom 10p rate if Labour win next year's Westminster election.
Labour officials were forced to confirm that Holyrood would gain some flexibility to alter the 10p rate in addition to the existing 20p, 40p and 45p rates - a detail that was omitted from the devolution commission's 260-page report published last Tuesday.
But urging members to back the proposals, Ms Lamont said: "There is a clear message: if the people of Scotland vote to stay strong and remain in the UK, that we are voting for change.
"We are voting to end a landscape inhabited by false choices with a cold indifference to what is happening in the real world, where a Nationalist government will settle for the trading of slogans rather than making a difference to people's lives.
"We are looking to a politics rooted in the real world where the politicians look at the powers they have and say, 'How can we make a difference to people's lives?'"
She said the new powers would remove what she called the Scottish Government's "alibi for the nation's problems" and ensure "those with the broadest shoulders take a little more of the burden''.
The reforms do not go as far as initial proposals discussed at Labour's conference in Inverness a year ago.
The earlier package, which included devolving income tax "in full", caused a major rift within the party.
Yesterday, one of the MSPs who had spoken out against the plan, former finance spokesman Ken Macintosh, gave his backing.
He said: "I offer my own three cheers for the devolution commission. That is not a line Johann expected to hear from me a couple of weeks back.
"I believe we have before us a set of proposals that will not enhance the devolution settlement, it will improve people's lives in Scotland.''
Ms Lamont has given assurances the devolution plans will be included in Labour's manifesto for next year's Westminster elections.
However, the SNP last week claimed the proposed powers did not go far enough, while Reform Scotland, the centre-right think tank, challenged Labour's claim they would make Holyrood responsible for raising 40% of the money it spends, insisting the true figure was 26%.
In a fresh attack last night Mr Swinney said: "Labour have been found out, and their shambolic plans have today imploded.
"Their sums don't add up, and no amount of back-pedalling and back of an envelope calculations can hide that.
"What this embarrassing fiasco proves is that Labour's plans for more powers are no more than a shabby compromise, cobbled together between warring factions in London and Scotland."